John Hood iSh JPMorgan USD Emerg Mk Bond XEB-T DON'T BUY Jul 29, 2011

This is corporate bonds and is dominated by Canadian bank bonds. He still owns a little in his institutional portfolios but is starting to shift to things like the preferred share market such as the iShare S&P/TSX Preferred Fund (CPD-T) which is also dominated by the banks but has a full percentage point higher yield.

Emerging Markets and is made up of the ugly ducklings out there. As China slows down, some of the emerging market countries that have been suffering over the past year or so start to stimulate by keeping interest rates low, etc. This tends to be a good contrarian play as well. After last year’s meltdown of the bond market in general, emerging bond markets fell along with it. Chart showed a little bit of a triangle, followed by a breakout early this year. Technically it looks like it could get back to its old highs of $23.

Canadian dollar hedged. Okay to hold a small percentage. Keep a close eye on it with US market turning around.

(A Top Pick May 27/14. Up 1.17%.) Emerging markets was very much out of favour at the beginning of the year. He felt the area was oversold. Thinks it is a pretty good place to be for the time being.

Banks. What is next: Likes XEB-T, the equal weight ETF for the banks. You are seeing lower lows and lower highs. He wonders why we would go down and test the lows of last February. It would be bank earnings, which we won’t see for 3 to 4 weeks. Expects numbers to be down a bit, but that is what the market has priced in. They are starting to get pretty cheap so he would be okay starting to nibble on Canadian banks.